Cannabis company HEXO Corp (TSX:HEXO) (NYSE:HEXO) had been on the charge in recent days, and its stock has performed impressively over the course of the past month or so. The trajectory of the stock in the near term depended a lot on how Hexo performed in its third fiscal quarter, and in that regard, the company did not disappoint.
The company released its third fiscal quarter financial results on Thursday, and soon enough, the stock surged as investors piled on to it. The company’s decision to come up with a product priced to compete with the black market seems to have paid off as well.
Hexo’s Original Stash brand managed to generate sales of as much as $21 million in the quarter, and the company credited the affordable brand for its performance in the quarter. The brand made up as much as 50% of the 9338 kilos of cannabis that was sold for non-medical purposes in the quarter.
Original Stash is priced at $4.49 per gram and is geared towards weaning consumers away from the black market. While the company still suffered a loss of as much as $19.5 million for the quarter, it should be noted that net sales soared by as much as 30% to hit $22.1 million.
At the same, Hexo managed to slash its EBITDA net loss by half to $4.3 million. The company also stated that it is hoping to hit profitability at some point in the first six months of next year. However, the Canadian company added that it would be dependent on the speed at which retail stores reopen following the coronavirus pandemic.
Hexo also beat analysts’ estimates of a net loss of $14.6 million, EBITDA loss of $8.3 million, and net sales of $20.3 million. The performance came as a boost to the stock as well, and it jumped by as much as 10% during early trading yesterday. Earlier, the Hexo stock had soared by 30% in premarket trading.